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How easy will it be to move from purely domestic to international marketing? Would your business benefit from inward foreign investment? What is the nature of competition within each individual market, and how will companies from other nations compete when you meet with them head-to-head in unfamiliar countries?
Many other factors that are specific to your organization or industry. Political
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Is there any historical relationship between countries that would benefit or hinder international marketing? What is the influence of communities or unions for trading? E.g. The European Union and its authority over European laws and regulation.
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What kind of international and domestic laws will your business encounter? What is the nature of politics in the country that you are targeting, and what is their view on encouraging foreign competition from overseas? Economic
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What is the level of new industrial growth? E.g. China is experiencing terrific industrial growth. What is the impact of currency fluctuations on exchange rates, and do your home market and your new international market - share a common currency? E.g. Polish companies trading in Eire will use Euros.
There are of course the usual economic indicators that one needs to be aware of such as inflation, Gross Domestic Product (GDP), levels of employment, national income, the predisposition of consumers to spend savings or to use credit, as well as many others. Socio-cultural
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Culture, religion and society are of huge importance. What are the cultural norms for doing business? E.g. is there a form of barter?
Will cultural norms impact upon your ability to trade overseas? E.g. Putonghua is very difficult for many Western people to learn. Technology
Do copyright, intellectual property laws or patents protect technology in other countries? E.g. China and Jordan do not always respect international patents.
Does your technology conform to local laws? E.g. electrical items that run on non-domestic currents could be dangerous.
Are technologies at different stages in the Product Life Cycle (PLC) in various countries? E.g. versions/releases of software.
The Terpstra and Sarathy Cultural Framework helps marketing managers to assess the cultural nature of an international market. It is very straight-forward, and uses eight categories in its analysis. The Eight categories are Language, Religion, Values and Attitudes, Education, Social Organizations, Technology and Material Culture, Law and Politics and Aesthetics.
Language
With language one should consider whether or not the national culture is predominantly a high context culture or a low context culture (Hall and Hall 1986). The concept relates to the balance between the verbal and the non-verbal communication. In a low context culture spoken language carries the emphasis of the communication i.e. what is said is what is meant. Examples include Australia and the Netherlands. In a high context culture verbal communications tend not to carry a direct message i.e. what is said may not be what is meant. So with a high context culture hidden cultural meaning needs to be considered, as does body language. Examples of a high context cultures include Japan and some Arabic nations.
Religion
The nature and complexity of the different religions an international marketer could encounter is pretty diverse. The organization needs to make sure that their products and services are not offensive, unlawful or distasteful to the local nation. This includes marketing promotion and branding.
In China in 2007 (which was the year of the pig) all advertising which included pictures of pigs was banned. This was to maintain harmony with the country's Muslim population of around 2%. The ban included pictures of sausages that contained pork, and even advertising that included an animated (cartoon) pig.
In 2005 France's Catholic Church won a court injunction to ban a clothing advertisement (by clothing designers Marithe and Francois Girbaud) based upon Leonardo da Vinci's Christ's Last Supper.
In 2004, China banned a Nike television commercial showing U.S. basketball star LeBron James in a battle with animated cartoon kung fu masters and two dragons, because it was argued that the ad insults Chinese national dignity.
In 2006, Tourism Australian launched its ad campaign entitled "So where the bloody hell are you?" in Britain. The $130 million (US) campaign was banned by the British Advertising Standards Authority from the United Kingdom. The campaign featured all the standard icons of Australia such as beaches, deserts, and coral reefs, as well as traditional symbols got Then, like the the from a Opera House sharks bikini-clad and the Sydney out blonde, Harbour of come the Bridge. The the tag commentary ran: pool,". line: "We've poured you a beer and we've had the camels shampooed, we've saved you a spot on the beach. We've even
Education
The level and nature of education in each international market will vary. This may impact the type of message or even the medium that you employ. For example, in countries with low literacy levels, advertisers would avoid communications which depended upon written copy, and would favor radio advertising with an audio message or visual media such as billboards. The labeling of products may also be an issue.
In the People's Republic of China a nationwide system of public education is in place, which includes primary schools, middle schools (lower and upper), and universities. Nine years of education is compulsory for all Chinese students.
In Finland school attendance is compulsory between the ages of 7 and 16, the first nine years of education (primary and secondary school) are compulsory, and the pupils go to their local school. The education after primary school is divided to the vocational and academic systems, according to the old German model.
In Uganda schooling includes 7 years of primary education, 6 years of secondary education (divided into 4 years of lower secondary and 2 years of upper secondary school), and 3 to 5 years of post-secondary education.
Social Organizations
This aspect of Terpstra and Sarathy's Cultural Framework relates to how a national society is organized. For example, what is the role of women in a society? How is the country governed - centralized or devolved? The level influence of class or casts upon a society needs to be considered. For example, India has an established caste system - and many Western countries still have an embedded class system. So social mobility could be restricted where caste and class systems are in place. Whether or not there are strong trade unions will impact upon management decisions if you employ local workers.
Trevor Baylis launched the clockwork radio upon the African market. Since batteries were expensive in Africa and power supplies in rural areas are non-existent. The clockwork radio innovation was a huge success.
China's car market grew 25% in 2006 and it has overtaken Japan to be the second-largest car market in the world with sales of 8 million vehicles. With just six car owners per 100 people (6%), compared with 90% car ownership in the US and 80% in the UK, the potential for growth in the Chinese market is immense.
Aesthetics
Aesthetics relate to your senses, and the appreciation of the artistic nature of something, including its smell, taste or ambience. For example, is something beautiful? Does it have a fashionable design? Was an advert delivered in good taste? Do you find the color, music or architecture relating to an experience pleasing? Is everything relating to branding aesthetically pleasing?
experiencing political instability and any company entering such a market would need to be rewarded for the risk that they would take. At this point the marketing manager could decide upon a shorter list of countries that he or she would wish to enter. Now in-depth screening can begin.
Exporting
There are direct and indirect approaches to exporting to other nations. Direct exporting is straightforward. Essentially the organization makes a commitment to market overseas on its own behalf. This gives it greater control over its brand and operations overseas, over an above indirect exporting. On the other hand, if you were to employ a home country agency (i.e. an exporting company from your country - which handles exporting on your behalf) to get your product into an overseas market then you would be exporting indirectly. Examples of indirect exporting include:
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Piggybacking whereby your new product uses the existing distribution and logistics of another business. Export Management Houses (EMHs) that act as a bolt on export department for your company. They offer a whole range of bespoke or a la carte services to exporting organizations. Consortia are groups of small or medium-sized organizations that group together to market related, or sometimes unrelated products in international markets. Trading companies were started when some nations decided that they wished to have overseas colonies. They date back to an imperialist past that some nations might prefer to forget e.g. the British, French, Spanish and Portuguese colonies. Today they exist as mainstream businesses that use traditional business relationships as part of their competitive advantage.
Licensing
Licensing includes franchising, Turnkey contracts and contract manufacturing.
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Licensing is where your own organization charges a fee and/or royalty for the use of its technology, brand and/or expertise. Franchising involves the organization (franchiser) providing branding, concepts, expertise, and infact most facets that are needed to operate in an overseas market, to the franchisee. Management tends to be controlled by the franchiser. Examples includeDominos Pizza, Coffee Republic and McDonald's Restaurants.
Turnkey contracts are major strategies to build large plants. They often include a the training and development of key employees where skills are sparse - for example, Toyota's car plant in Adapazari, Turkey. You would not own the plant once it is handed over.
Shared manufacturing e.g. Toyota Ayago is also marketed as a Citroen and a Peugeot.
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Research and Development (R&D) arrangements. Distribution alliances e.g. iPhone was initially marketed by O2 in the United Kingdom. Marketing agreements. Essentially, Strategic Alliances are non-equity based agreements i.e. companies remain independent and separate.
Access to technology, core competences or management skills. For example, Honda's relationship with Rover in the 1980's.
To gain entry to a foreign market. For example, any business wishing to enter China needs to source local Chinese partners.
Access to distribution channels, manufacturing and R&D are most common forms of Joint Venture.
Internationalization Stages
So having considered the key modes of entry into international markets, we conclude by considering the Stages of Internationalization. Some companies will never trade overseas and so do not go through a single stage. Others will start at a later or even final stage. Of course some will go through each stage as summarized now:
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Indirect exporting or licensing Direct exporting via a local distributor Your own foreign presences Home manufacture, and foreign assembly Foreign manufacture
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The nature and level of competition for marcoms channels in your target market. Whether or not there is a rich variety of media in your target market. The level of economic development in your target market (for example, in remote regions of Africa there would be no mains electricity on which to run TVs or radios).
The availability of other local resources to assist you with your campaign will also need to be investigated (for example, sales people or local advertising expertise).
Local laws may not allow specific content or references to be made in adverts (for example, it is not acceptable to show naked legs in adverts displayed in Muslim countries).
And of course a lot depends upon the purpose of the international campaign in the first place. What are your international marketing communications objectives?
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Levels of literacy and the availability of education for the national population. The similarity or diversity of beliefs, religion, morality and values in the target nation. The similarity or diversity of beliefs, religion, morality and values in the target nation. The family and the roles of those within it are factors to take into account.
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It is beneficial where wages tend to be low, since staffing costs will be comparatively low. Where there are many languages, you'll need trained sales personnel that can convey your message in specific tongues (see culture above).
The sales force will need to be supported. Commercial administration staff will have to take care of sales enquiries, send out product literature and samples, and make quotations - often online.
You'll need to invest time and effort in recruiting, motivating, organizing and training a local sales force. Recruits will need to know about products and markets, language and culture, the location of target segments, customer buyer behaviour - and that's just the beginning.
There is a dilemma as to whether to place expatriate employees into your international target market, or to recruit locally. Local is best!
Where business etiquette varies from culture to culture, you'll need to train your people in what to expect - or recruit salesmen from the local market.
When considering press advertising try to anticipate the levels of literacy within the nation in question. Where literacy levels are lower, perhaps you could use a more visual campaign.
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Which language(s) is the press written in? What is the split between regional and national press in your target market? What types of television channels are available? Are they HDD, digital, analogue, satellite, cable, via the telephone, via a broadband or ADSL connection?
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Which TV channels do our target segments watch? Is there space on the suitable TV channels when we want it, or at a price that we can afford? Where visual communication is paramount, are there suitable poster locations? What is the behavior of the target population in relation to cinema? For example, Cinema is tremendously popular in India.
Radio has similar issues as TV and press. Which stations do your target groups listen to - news, sports or music? Is there space available with the most suitable stations?
Web-based marketing using your own domestic site, or one developed specifically for the target market. Chinese websites are very different to Western sites. They are very busy and every single space is filled with images and text. Affiliate or pay-per-click advertising may be available.
International tradeshows, trade missions, sponsorship (for example international sporting events), Public Relations (for example oil companies) and a variety of other international marketing communications are available to the international marketer.
Of course fluctuations in foreign currencies affect pricing. Many companies are benefiting from a relatively low US Dollar price during the 2010s. This make imports to the United States expensive, but exports relatively cheap to other nations. However fluctuations make it very difficult for companies to make long-term decisions - such as building large factories in global markets i.e. costs of production are cheap today, but could be expensive in the future, impacting upon the price that your business is forced to charge.
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The price that the international consumer is willing to pay for your product. Your own business objectives will influence price. For example, large international companies such as Starbucks may operate at a loss in some locations but still need a local presence in order to maintain their economies of scale, as well as their reputation as a global player.
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The price that competitors in international markets are already charging. Business environment factors such as government policy and taxation.
Grey Markets
A business can expect problems with grey markets where it trades across national boundaries. So if Company Y is English it will trade in Sterling or Pound notes. If it trades in the United States during the 2010s, to be competitive it will need to sell at a reduced price in the US. However, there is little to stop an entrepreneur from traveling to the US, filling up a transport container with products, which have been exported from Company Y in England, then returning
them back to England and marketing the same product at a lower price than Company Y is willing to trade. This is an example of parallel trade, which is legal - just. Therefore it is known as grey marketing.
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Non-cash payments - less and less popular these days, non-cash payments include counter-trade where goods are exchanged for goods between companies from different parts of the World. Transfer Pricing - prices are set in the home market, and goods are effectively sold to the international subsidiary which then attaches its own margin based upon the best price that local managers decide that they could achieve. Then mainstream approaches to pricing may be implemented - see below.
Standardization versus adaptation - do you use a standard, common approach to pricing in each market, or do you decide to adapt the price to local conditions?
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Product Life Cycle (PLC) - products could be at different points in the PLC in various nations, possibly creating new opportunities. Ansoff's Matrix - market development could mean that an existing product is marketed in a new international market. Three Levels of a Product - marketers would consider the local market's need for core, actual and augmented products. Internet Marketing and Product - how do eMarketers make product decisions? However, international product decision-making often centers around the standardization versus adaptation debate. Essentially, do we market the same, standard product in an international market or segment, or do we localize it, and adapted it so that it pleases local tastes? Here are some of the advantages and disadvantage of standardization.
Advantages of Standardization.
International uniformity has its own advantages. As people travel the World, they can be assured that wherever they go the product that they buy from you will be same and that it will have the same, standard benefits. This could mean the components that they buy from you in different local markets as they themselves become global. Standardization reinforces positive consumer perceptions of your product. One of the payoffs of great quality for a single product category is that the reputation of your product will help you sell more of it. Positive word-of-mouth pays dividends for brand owners. Cost reduction will give economies of scale. Since you are making large quantities or the same, non-adapted product - you benefit from the advantages associated with manufacturing in bulk. For example, components can be bought in large quantities, which reduces the cost-per-unit. There are other benefits relating to economies of scale, including improved research and development, marketing operational costs, lower costs of investment, and in an age where trade barriers are coming down - standardization is a plausible product strategy. Quality is improved since efforts are concentrated upon the single product. Staff can be trained to enhance the quality of the product and manufacturers will invest in technology and equipment that can safeguard the quality of the standardized product offering.
Disadvantages of Standardization.
Since the product is the same wherever you buy it, it is wholly undifferentiated. It is not unique in anyway. This leaves the obvious opportunity for a competitor to design a tailor-made, differentiated or branded product that meets the needs of local segments. Of course products have different uses in different countries (for example cycling is a leisure activity in some nations, and a form of transport in others). Local markets have local needs and tastes. Therefore by standardizing, you could leave yourself vulnerable. Another problem with standardization is that it depends largely upon economies of scale. With global businesses, your business will manufacture in a number of nations. However, some countries implement trade barriers (and yes this includes the USA and the European Union). If this is the case, then localization and the resultant adaptation is inevitable. What exactly do you intend to standardize? Is your whole product 'experience' to be standardized? Do you standardize customer service and product support, marketing communications, pricing, and channels of distribution? Then you have a standardized marketing mix - surely this cannot benefit your business.